Investing in Equity and its Tax Implications

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With the stock markets reaching an all-time high, many investors are increasingly interested in taking at least a small allocation to equities. However, before deciding to invest in equities, it is important for an investor to ascertain a few things like, choice of company, the price at which one should invest, investible amount, etc. One can then choose amongst the following options.

1. Direct investment in shares

Direct investment is more commonly referred to as foreign direct investment (FDI). FDI refers to an investment in a foreign business enterprise designed to acquire a controlling interest in the enterprise.

The direct investment provides capital funding in exchange for an equity interest without the purchase of regular shares of a company’s stock. For this, one needs to research the company to invest in. A Demat account needs to be opened along with a trading account with a broker. A bank account and KYC compliance are also mandatory.

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